JMP Securities analyst Nicholas Jones rated Amazon.com Inc (NASDAQ:AMZN) shares with Market Perform and a price target of $225.

Jones noted that Microsoft Corp's (NASDAQ:MSFT) Azure and other cloud services revenue missed consensus expectations by 1.5%. Conversely, Alphabet Inc (NASDAQ:GOOG) (NASDAQ:GOOGL) Google Cloud beat Street expectations by 1.5%.

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Before Microsoft's earnings, the analyst noted investor expectations for fiscal 2024 second-quarter Amazon Web Service (AWS) revenue growth was 18% y/y, vs. consensus of 17.3%, Jones said.

Despite Microsoft's results, Jones noted investors will still look for AWS growth of 18% in the second quarter. He said the probable range is likely 16.5%-18.5% based on recent historical AWS-to-Azure growth ratios and Microsoft's commentary.

Microsoft guided Azure and other cloud services revenue to grow 28%-29% cc, versus consensus expectations of 30.2%, Jones flagged. The analyst added management pointed to softness in some European geographies and capacity constraints as crucial factors behind Azure's softer numbers.

Jones does not expect Amazon's AWS business to have the same capacity constraints as Microsoft's Azure business, therefore positioning Amazon to deliver stable-to-accelerating AWS growth trends through the rest of the year.

Accordingly, Jones is incrementally optimistic about Amazon and noted it is likely to increase share gains.

Jones projected second-quarter revenue and EBITDA of $147.39 billion and $30.78 billion.

AMZN Price Action: Amazon shares traded higher by 2.74% to $186.74 at the last check Wednesday.

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